VALLE UMBRA WATER SECTOR UPGRADE- GREEN LOAN

The project concerns VUS's 2023-2028 water and wastewater investment programme, aimed at improving system resilience through interconnections of the water distribution networks, new water sources, and leakage reduction as well as optimisation of existing sewerage treatment facilities.

The aim is to support the promoter's investments (e.g. water and wastewater treatment plants, sewerage networks, and energy efficiency) in the Italian region of Umbria.

The Project is in line with the InvestEU objective of Environment and Resources. The Project will support investments in water and wastewater infrastructure in the Umbria Region in Italy, by improving the coverage and quality of integrated water services, and bringing operational efficiency improvements, as well as increasing resilience towards droughts. In doing so, it will also ensure compliance with key European regulations in the water sector. Being located in Umbria, a transition cohesion region in Italy, the Project will contribute to the EU's economic social and territorial cohesion.

The Project will contribute to the Bank's policy objectives of Sustainable Energy and Natural Resources as well as Climate Action and Environmental Sustainability. The Project will address a number of market failures, including those associated with public goods, unaccounted for externalities and information failures, generating positive health, environmental benefits and water security (including resilience against climate change), which would not be realised to the same extent without public intervention.

Given the counterpart's relatively small size and low capital levels, the EIB would not be able to provide financing support to the same extent without InvestEU. The EIB support is expected to bring a tangible value added by lowering the project's cost of funding and offering a tenor longer than the one normally proposed by other financers. Moreover, the Bank is providing an important technical contribution through an advisory assignment for the development of the Promoter's decarbonisation plan. Considering the magnitude of the Project's funding needs, it is expected that the EIB support will contribute to accelerate its implementation.

The upgrade of water and wastewater infrastructure brings positive environmental impacts. Compliance with the EU Water Framework Directive (2000/60/EC), Urban Waste Water Treatment Directive (91/271/EEC) and EU and national environmental legislation, notably under the environmental impact assessment (EIA) Directive 2011/92/EU (amended by the Directive 2014/52/EU), Birds Directive (2009/147/EC) and Habitats Directive (92/43/EEC) will be verified during appraisal. The Project is expected to contribute to climate action and environmental sustainability (CA&ES) objectives, in particular to climate adaptation and mitigation, as well as water resources protection. This Project also brings substantial health advantages and environmental quality improvements to the affected population, thereby increasing the quality of life in the project area. Social negative impacts are only temporary (e.g. occupation of public and private space, safety hazards during construction, traffic, noise) and will be addressed as part of the planning for the implementation of each scheme. The Promoter has demonstrated sound practices concerning to environmental, health and safety management. As per social matters, the promoter will also be requested to comply with the relevant applicable legislation.

The promoter has to ensure that contracts for the implementation of the project have been or will be tendered in accordance with the relevant applicable EU procurement legislation, Directives 2014/23/EU and/or 2014/24/EU and/or 2014/25/EU where applicable, as well as Directive 92/13/EEC and Directive 89/665/EEC as interpreted by the Court of Justice of the EU, with publication of tender notices in the EU Official Journal, as and where required.